When did affiliate marketing start? The concept of revenue sharing predates affiliate marketing and the internet. But it was 1989 when William J. Tobin set up an internet affiliate program for his business, PC Flowers & Gifts. By 1995 PC Flowers & Gifts had launched a commercial version of the website and had 2,600 affiliate marketing partners on the internet. Tobin applied for a patent on tracking and affiliate marketing on January 22, 1996. He was issued a U.S. Patent on Oct 31, 2000.
Amazon.com (Amazon) launched its associate program in July 1996. In February 2000, Amazon was granted a patent on components of an affiliate program. Most people think of Amazon as the first online affiliate program and Amazon’s patent was submitted in June 1997. This predates most affiliate programs, but not PC Flowers & Gifts.com (October 1994), AutoWeb.com (October 1995), Kbkids.com/BrainPlay.com (January 1996), EPage (April 1996), and several others who were there before Amazon.
Although Amazon wasn’t the first affiliate program, it was the first one which was available to the general public. Amazon helped popularise affiliate marketing and made it become more widely known.
When Did Affiliate Marketing Start?
80% of affiliate programs today use revenue sharing models or pay per sale (PPS). (Others use cost per action or pay for traffic, rather than sales). This means that for most affiliate programs, the affiliate who refers the product gets paid a commission based on the sale. Mostly, affiliates earn money by referring customers to products online.
They don’t have to personally own anything themselves, which is one of the reasons why affiliate marketing is such a popular business model. Anyone can learn affiliate marketing from anywhere. They only need to learn how to drive traffic to any given affiliate program. All they need is a laptop and internet connection.
Many affiliate programs are completely free to join too. This means almost anyone can join and promote their affiliate link for a share of revenue! So why aren’t more people becoming affiliate marketers and earning their own independent income from their laptops?
There’s a few answers to this. Many people are still unaware of the affiliate marketing business model. Even if you are aware of affiliate marketing, there’s still a lot to learn to become successful as an affiliate. As more people have taken to the internet to sell their own products, and other people’s, there has become more competition for affiliate marketers. This makes it more difficult to make a living using the affiliate model.
Why Affiliate Marketing Is Here To Stay
Affiliate marketing is a revenue sharing business model which puts the main risk at the hands of the affiliate. If a business owns a product or service, they can offer out a percentage of revenue to the referrer for making a sale. But they only pay when a sale is made! This puts the risk firmly in the hands of the affiliates, not the business owner!
The affiliate has to figure out how to send targeted website traffic to a product and make a sale. They only get paid when a sale is made, unless they are in a CPA offer (cost per action). This makes it super cost effective to pay affiliates. Far cheaper than risking your own marketing budget is to pay an affiliate to take that risk themselves!
Affiliates too want to make independent income and this is often their driving ambition and reason for learning affiliate marketing. If an affiliate can make their living online, selling affiliate products, it means they can pretty much control their time and not work as an employee.
A recent Gallop poll showed that 85% of workers are unhappy in their work. This means there’s a huge market for affiliate marketers. There’s a never ending surplus of people wanting to quit their jobs, or who are looking for an extra income. Plus many jobs are being replaced by automation in almost every sector of society. So more affiliates are bound to enter the marketplace. The rate of e-commerce sales is booming. This means many high street stores will continue to close, leaving people without employment.
What It Takes To Be Successful?
To become successful as an affiliate takes more than most people can achieve. In fact, 95% of affiliates will quit. See affiliate marketing failure rate. Perhaps the huge competition explains this is part. But it can also be explained by the ease of entry to affiliate marketing. Most businesses will require a huge financial investment in order to get started.
For a physical “bricks and mortar” business, you need business premises, staff, equipment, permits etc. There’s a large start up cost involved. But with affiliate marketing you only need a laptop and internet connection. Most people have these!
To become successful as an affiliate means you need to learn how to sell affiliate products. It’s easy to join a program and get an affiliate link. What isn’t so easy is to learn how to put your marketing message in front of a lot of people. This can take either a lot of time, or a large investment in your marketing budget, or both! See 22 ways to promote affiliate products for some of the marketing strategies available to affiliates.
Summary
When did affiliate marketing start? Referral compensation schemes have been around long before the internet. But it was 1989 when William J. Tobin set up an internet affiliate program for his business, PC Flowers & Gifts. This is when affiliate marketing first appeared on the internet. Amazon followed shortly behind in 1996 with the first publicly accessible program which anyone could join. Since then, affiliate marketing has grown in popularity around the world and this trend is set to continue.